Negative Effects


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    Proprietor Income consists of payments received by self-employed individuals and unincorporated business owners, and includes the capital consumption allowance. It is an indicator of the profit of self-employed persons and can be negative in some years/sectors/regions. Labor Income = Employee Compensation + Proprietor Income so the negative Direct Labor Income multiplier suggests a negative Proprietor Income that is greater in magnitude than the positive Employee Compensation. Similarly with the negative Induced Multipliers - if the negative Proprietor Income outweighs the positive Employee Compensation, then household spending (which drives the induced effect) will be negative (i.e., households will spend less). While these cases reflect the true state of the sector during the data year, they yield unexpected results when running impacts. Thus, if you are modeling a positive impact in a sector that has negative PI, you may want to edit the study area data to reflect the PI of your firm/project. If you don't have information about PI, you could set PI = $0 or use a ratio (e.g., PI per employee) from the most comparable industry. After making any edits to the study area data, you will need to reconstruct the multipliers (Options > Construct > Multipliers), which should then be positive.
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